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Mar 18, 2022
TORONTO – Since the Canadian Securities Administrators (CSA) adopted final rules that implement a ban on the payment of trailing commissions by fund organizations to dealers who do not make a suitability determination, such as order-execution-only (OEO) dealers (the “OEO Trailer Ban”), the CSA has consulted with industry stakeholders to ensure investment fund managers and OEO dealers can implement an investor-centric transition away from mutual fund series with trailing commissions.
The CSA announces today temporary exemptions published by the Ontario Securities Commission (OSC) aimed at facilitating the OEO Trailer Ban in Ontario. Other CSA jurisdictions anticipate publishing exemptions in the form of local blanket orders shortly.
OEO dealers and fund organizations will be exempted from the OEO trailer ban to facilitate dealer rebates of trailing commissions to clients holding mutual funds in OEO dealer accounts and process client transfers. Under the terms and conditions of the temporary exemptions:
In Ontario, the temporary exemptions will be implemented through a local blanket order. The order comes into force on June 1, 2022, the effective date of the OEO Trailer Ban, and expires on November 30, 2023. While all jurisdictions will have the same effective date of June 1, 2022, some jurisdictions will not set an expiry date on their local blanket order at this time and instead revoke their blanket order at a future date.
Market participants will be able to view these orders, once approved, on the relevant CSA jurisdictions’ websites and are encouraged to contact their local regulator with any questions.
Investors should contact their OEO dealer with any questions or to request more information.
The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.
For investor inquiries, please contact your local securities regulator.
For Media Inquiries:
Pascale Bijoux Canadian Securities Administrators email@example.com
JP Vecsi Ontario Securities Commission firstname.lastname@example.org